The Biden Administration has changed the definition of the term recession. It has traditionally been defined as two consecutive quarters of falling activity, and The White House blog pointed to the assessment of NBER, a private non-profit association, as the ultimate criterion.
The issue is politically relevant, because by the traditional definition, the United States is already in recession. And the Biden Administration wants to avoid the political effect of that word three months before the November elections.
Facebook censorship
Pillip Magness is the director of research and education at the American Institute for Economic Research, a prestigious institution founded in 1933. Magness wrote a Facebook post explaining why the White House's claim that the official definition of "recession" was the NBER's was false. Moreover, it showed that the federal government always used the traditional definition, so it should have assumed that we are now in a recession.
But 'fact-checker' Politifact censored the economist's post. At this time, it cannot be found. Politifact says that the claim "The White House is now trying to protect Joe Biden by changing the definition of the word recession" is false. Magness calls Facebook's censorship "Orwellian."
Self-denying
According to the economist, in an interview with Reason: "In this case, PolitiFact's 'ruling' is compounded by the fact that they have previously invoked the very same definition of a recession—2 consecutive quarters of GDP decline— in previous rulings to either provide cover to exaggerated Democratic claims about an impending recession or tear down Republican claims to the same effect." In other words, Facebook's censorious body disavows itself in order to be able to remove a post uncomfortable with the Biden Administration from Facebook.
The AIER economist has written an article in the Wall Street Journal explaining why the definition of recession was always the same, and consequently why the Biden Administration is lying when it says it was always what NBER said.
The traditional position of the federal government
Magness cites the most widely used economics textbook in history, that of Paul Samuelson and William Nordhaus, who used the traditional definition of "recession". A definition that, says Magness "describes almost every downturn since World War II". The federal laws themselves reflect this criterion. The Gramm-Rudman-Hollings Act provides for a set of automatic economic policy actions when there is a recession, and defines a recession as a situation in which "real economic growth is projected or estimated to be less than zero with respect to each of any two consecutive quarters". The Congressional Budget Office uses the same definition.
This definition, as the economist acknowledges, has its limitations. The NBER criteria, which is more open and depends on the judgment of eight experts, has the disadvantage that it is done after the fact and can take more than a year before reaching a verdict. Something very convenient for the Biden Administration, as Magness points out, since what it wants to avoid is an early declaration that we are in a recession.
Facebook goes the way of Wikipedia
Facebook thus joins Wikipedia, which has also helped whitewash the Biden Administration's attempt to redefine the term. The debate among Wikipedia editors was so acrimonious that the collaborative encyclopedia ceased to be one, and set the definition of recession according to Biden's interests, without giving the option to change it. Wikipedia was even forced to fix the "definition" entry, because the debate had moved there.
